1. Look up the definitions of Nominal and Real Interest Rates.

a) Is the Interest Rate quoted to borrowers (e.g., Mortgage, Auto Loans, Business loans, etc.) a Nominal or Real rate?

b) If you are a business borrower, Do you care more about the nominal or the real interest rate, why?

2. Other things being equal, people who are more optimistic about the future will lend their money out at a lower rate than people who are less optimistic. True or False?